17.01.2025

Calls For Clarity On Integration With Freeports And Investment Zones To Boost FDI

As Investment Minister Poppy Gustafsson marks 100 days in the job (18 January), a team of international lawyers have called for the newly proposed AI Growth Zones to be accelerated to help boost levels of Foreign Direct Investment (FDI) into the UK.

FDI experts at Irwin Mitchell have also requested that further clarity on how AI Growth Zones will work alongside Freeports and Investment Zones would be beneficial.

AI Growth Zones are one of 50 recommendations set out earlier this week by entrepreneur and venture capitalist Matt Clifford in his AI Opportunities Action Plan.

In the document, he highlighted how AI Growth Zones will aim to consolidate infrastructure development, fast-track investment, foster innovation, and create jobs in local communities.

Culham, on the outskirts of Oxford, has been chosen as the first AI Growth Zone due to its Science Centre, the UK Atomic Energy Authority’s headquarters, which has access to significant power to supply future data centres, and available land.

Expert Opinion

“The UK seems to be positioning itself ahead of the rest of Europe in demonstrating its appetite for AI. Although it’s difficult to predict how FDI trends relating to the US will be impacted by the new President Donald Trump, ambitious plans such as those announced this week should put us in a strong position and make the UK more attractive to a wider pool of investors.” Bryan Bletso, partner and Head of International at Irwin Mitchell

Irwin Mitchell suggests the following areas of focus for Poppy Gustafsson in relation to AI zones and generating higher levels of FDI:

Key Areas of Focus:

• Clarity on Integration with Freeports and Investment Zones: Provide clear guidelines on how AI Growth Zones will work alongside Freeports and Investment Zones. This clarity will help investors understand the synergies and benefits, making the UK a more attractive destination for foreign investment.
• Accelerating the Introduction of AI Growth Zones: Fast-track the establishment of additional AI Growth Zones across the UK. By quickly rolling out these zones, the UK can capitalise on the momentum and attract immediate investment. This includes identifying strategic locations with existing infrastructure and potential for development.
• Strong Fundamental AI Research: Expand research funding and foster international collaborations to enhance knowledge exchange and innovation, leveraging the UK’s strong reputation in education and the advantage UK universities offer in producing and developing research and graduates of AI-related courses.
• Vibrant Startup and Scaleup Scene: Provide more grants and subsidies for AI startups and establish mentorship programmes to help them scale up.
• Leading Frontier AI Companies: Create incentives for global AI companies to set up headquarters in the UK and develop collaborative ecosystems.
• Global Leadership on AI Safety and Governance: Invest in AI safety research and develop clear regulatory frameworks to support innovation.
• Strategic Location and Time Zone: Promote the UK’s strategic location and time zone advantages to attract international collaborations.
• Government Support and Infrastructure: Continue investing in AI infrastructure and develop policies that support AI innovation and attract foreign investment.

Expert Opinion

“Overseas investors still seem very interested in the opportunities in the UK and it’s vital the narrative relating to our AI strengths is crystal clear and we’re maximising our strengths. The newly proposed AI Growth Zones are an important addition to how we position ourselves to overseas markets, and it’s crucial we build on the momentum and keep moving forward.” Bryan Bletso

The latest FDI statistics from the Office for National Statistics recently published the, revealing that the value of the UK’s inward FDI position increased by £126.8 billion, reaching £2,068 billion.

According to the latest statistics from the Department for Business and Trade, 1,555 projects landed in the UK during the 2023/24 financial year because of FDI, resulting in 71,478 new jobs being created.